State Snapshot

These Snapshots are designed to give you a brief overview of some of the key aspects of each State of Australia, and include the latest Economic and Property Market Statistics.

The Australian market has developed a level of consistency over many years.

The Australian Property Cycle usually lasts approximately 7 years, so do not be too focused on the one year performance, as you may have already missed the boat.

Each city has a different timing of it's cycle, but the characteristics are remarkably similar. For a detailed explanation of Australian Property Cycles visit our Members Only Special Reports Section.

The return over 15 years is an excellent guide as it would include 2 cycles and is a better representaive of each markets overall performance.

With such a close level of return in each state, it is safe to consider each market, and the primary focus should be on obtaining a quality property, rather than trying to "pick a winner".

The market will protect you and reward you for a quality decision rather than a speculative one.

As with all property markets around the world, Australia was affected by the Global Economic Crisis as fear has gripped buyers and nervousness pushed prices lower, albeit briefly. It was the first to emerge into positive growth which has demonstrated how safe and secure the Australian market is based on fundamentals of good regulation, sensible supply and a regular quality inflow of migrants.

This saw the Australian property markets recover much faster than other countries as the global economic position improved throughout 2009.

The growth results in the twelve months to June 2010 were extremely attractive. Some of it was recovery of the slow year and fear discount of the GFC, the majority was the market continuing its safe and steady moderate growth trend.

As such, the Australian market still offers excellent value for the astutue investor and a safer alternative than almost any other international property market.

The below table shows the long term growth trends achieved in each capital city over the past 15 years, based on the Quarterly Median House Prices to September 2011.

	September 2011 Median Value (A$'000's)	Average Annual Growth
		1 Year	5 Years	10 Years	15 Years
Sydney	$637.6	-1.60%	4.16%	7.27%	7.94%
Melbourne	$551.0	1.38%	8.89%	8.90%	9.56%
Brisbane	$427.5	-4.47%	7.88%	11.38%	8.10%
Perth	$490.0	-8.16%	7.88%	11.13%	8.86%
Adelaide	$390.0	-2.99%	7.47%	11.79%	8.79%
Canberra	$505.0	-1.94%	7.61%	11.03%	8.19%
Darwin	$507.3	-8.18%	11.08%	10.92%	7.88%
Hobart	$345.0	-6.76%	5.30%	12.32%	8.46%

Source Real Estate Institute of Australia

To calculate how your property has actually performed, you should use our Special Tool Box item, the Property Growth Rate Calculator, which will compute the annual growth rate over a stipulated period of time, so you can compare against the averages above.

New South Wales

The founding state of Australia , New South Wales has it's capital of Sydney nestled on the banks of the world famous Sydney Harbour .

Sydney is a truly world class city and has held icon status in Australia for many years thanks to its visually famous Sydney Harbour Bridge and Opera House.

A city of some 4 million people, it is regarded as the financial capital of Australia and successfully hosted the Olympic Games in 2000 bringing further prominence internationally.

The NSW coastline is truly magnificent with great beaches and panorama providing a great diversity of real estate options.

The Sydney property market is supported by the fact that a true land scarcity exists, as the city is bound by mountains and ocean, then a significant portion of area is consumed by the harbour.

This fact combined with the ongoing popularity as a destination for new migrants underpins a strong and healthy Real Estate Market.

NSW boasts a steady and reliable economy with the opportunity that being the largest city in Australia can offer.

Best Attributes

Current Economic Statistics

Source: 1 Australian Bureau of Statistics www.abs.gov.au
2 Real Estate Institute of Australia

Current New South Wales Property Market Comment

The NSW property market is missing two important elements, Belief and Supply.

Belief has been lacking as it has moved through the natural slow phase of the property cycle and each time it has built momentum it has been struck down. Firstly from interest rate rises in 2008/09, then the Global Financial Crisis in 2009 and recently in the fear of a double dip world recession and additional interest rate rises. Belief always is in short supply in the quiet phase of the market, but it gets quickly restored when the reality comes to the forefront.

Supply is the reality of the NSW market, and there simply isnt enough of it. This is putting great pressure on prices and is a problem that can not be easily remidied or ignored.

With markets now showing consistent rises, extremely low supply and very low new property stock, we expect the reality of a fast growing populaiton to ensure NSW property prices outperform the average over the next 3 years as it moves through the medium and fast phases of the property cycle.

This will be especially true in the top end market as people will happily pay for the quality and convenience.

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Victoria

The state of Victoria , has it's capital of Melbourne on the banks of the Yarra River , and is close proximity to Port Phillip Bay .

A city of some 2.8 million people, it has won the title “ World's Most Livable City ” on two separate occasions. When visiting Melbourne it is easy to understand why, as the locals truly enjoy the social aspects of living in a well integrated multi cultural environment.

Melbourne is famous for it's passion for sport, food, fashion and all things entertaining. The city regularly hosts special events and festivals so there is always some activity of interest.

The Yarra meanders through the edge of the city and past the famous Botanic Gardens which border the city.

Victoria boasts many natural resources, a very moderate climate and diverse mix of cultures, styles and activities.

Best Attributes

Current Economic Statistics

Source: 1 Australian Bureau of Statistics www.abs.gov.au
2 Real Estate Institute of Australia

Current Victoria Market Comment

Melbourne is the hot spot of Australian property right now.

This is excellent news if you had acquired prior to 2009, but not so good if you are looking to acquire now.

Strong populaiton growth and investor confidence are driving the market into the high growth phase of the cycle, but this will naturally slow down soon enough.

I would not discourage anyone from buying in Melbourne, especially if you want to purchase a good sized family living accomodation, but I would caution you to seek value rather than profit opportunity.

As a market slows, so does the likelyhood of quick and large growth. If you are in it for the long haul then buy, as prices won't get much cheaper, but dont be a speculator in a rising market.

Selection is important in this market as once again apartment sizes have reduced to meet price points, but if you follow the adage of location and quiality then Melbourne will ot disappoint over the medium to long term.

Houses have found new value points and the rental market remains tight so you will have no trouble finding a quality tenant and feeling confident of ongoing growth prospects.

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Queensland

The state of Queensland, has it's capital of Brisbane nestled on the banks of the Brisbane River .

A city of some 1.8 million people, it is Australia 's fastest growing city, mainly due to the popularity of new migrants and a large influx of Australians relocating form other states. The state tourism slogan of Queensland , beautiful one day, perfect the next aptly describes the great climate that this state enjoys.

As an investment option, there are many choices in the state of Queensland .

To the North, Cairns acts as a gateway to the World heritage Listed Great Barrier Reef and Rain forests, the Central Coast offers an endless stream of tropical beaches and islands, the Sunshine Coast has been an investment hotspot in recent times, Brisbane City continues to grow at excellent rates and to the south, The Gold Coast remains the dominant holiday destination in Australia with its Beaches and theme parks.

The overall appeal of this state and low state taxes has seen Queensland prosper and continue to enhance its reputation as an economic power state.

The economy is supported by many major mining, agricultural and tourism industries and is regularly attracting major business enterprises to use the state as a national or regional base.

Best Attributes

Current Economic Statistics

Source: 1 Australian Bureau of Statistics www.abs.gov.au
2 Real Estate Institute of Australia

Current Queensland Market Comment

The Brisbane property market is in a quiet phase at the moment even though it is recording good growth numbers. One of the main reasons for this is the delay in interstate migration as a result of the GFC, that deferred the sale and subsequent relocation of many people coming up from NSW & Victoria.

With those markets now gaining strength and value, expect this delay to end and perhaps the floodgates will open. Couple this with the strong international migraiton inflow and Brisbane may have a lot to look forward to.

The retirement and lifestyle markets of Gold Coast and Sunshine Coast have slowed considerably as investors remain cautious. This means there is great value in these markets as they lag in time behind the major state capitals in the recovery and growth, but it wont take long for the spark to ignite.

We remain very confident of the upside potential in Queensland on the back of strong population growth to this very popular and low living cost State.

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Western Australia

The state of Western Australia , has it's capital of Perth nestled on the banks of the Swan River .

A city of some 1.4 million people, it benefits from being a fairly young city. Although WA was colonised over 175 years ago, Perth has really only emerged as a significant population centre over the last 40 years.

The benefit of this is that the city is very modern, the infrastructure well planned and the potential still untapped.

Western Australia has great diversity and mineral wealth.

From the fantastic beaches, splendid rivers, and world famous wine districts to the alluring deserts and gorges of the north, there is something for everyone in Western Australia.

Almost every mineral can be found in this great state from the gold in Kalgoorlie , to the Oil, Gas, Iron Ore and Diamonds of the Kimberly region. This good fortune contributes to the strength of the state economy, which regularly boosts the lowest unemployment and strongest growth of all Australian states.

Best Attributes

Current Economic Statistics

Source: 1 Australian Bureau of Statistics www.abs.gov.au
2 Real Estate Institute of Australia

Current Western Australia Market Comment

Having already been in a slow market hase, the combination of rate rises and global slowdown (particularly in the valued minerals market) has led to a gloomy outlook in the Perth property market which now represents value.

How quickly we forget the glory days of over 30% annual growth and turn morbid. The good news is that the tide can change quickly again.

Already Perth prices are moving upwards as oversupply gets soaked up by the country's highest percentage population growth. Mining is back in vogue after the fear of the former Prime Minister Kevin Rudd's Mining Super Tax and the future is looking good.

it will not take long for the locals to realise that despite the recent surge in prices over the last 3 years, prices in Perth remain great relative value and when you have to live somewhere there is an inevitability of another upwards shift in prices.

It will take some sustained good news for people to believe again so you have time to be selective, but dont wait too long.

Seek value here while the bargains persist and look forward to a solid growth prospects over the medium term.

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South Australia

The State of South Australia has it's capital city Adelaide hosting 1.1 million of the states population of 1.5 million. Adelaide is known as the "City of Church 's" due to it's high number of churchs considered to be architectural icons.

With over 3,700kms of coastline the state has much natural beauty and benefits from it's close proximity to the other major Eastern States.

As such, South Australia has benefited greatly in becoming a manufacturing and service hub for many major National Corporations as it offers lower operational costs than it's larger neighbouring states.

The state is best known for producing some of the worlds best wines, with areas such as Coonawarra, McClaren Vale and the Barossa having instant recognition.

Wine is in fact the states major export with almost A$1.4 billion dollars worth of export sales in 2004.

A diversified mining and manufacturing base compliment this fine State.

Best Attributes

Current Economic Statistics

Source: 1 Australian Bureau of Statistics www.abs.gov.au
2 Real Estate Institute of Australia

Current South Australian Market Comment

Adelaide remains a consistent achiever with current house growth running at 14.1%pa.

Although the populaiton growth rate is lower then the national avergae, it is the quality and affluence of the incoming that is havign a positive influence on the local property market.

Adelaide still represents excellent value to anyone coming from interstate or overseas and the quality of locations and lifestyle is hard to beat.

We remain very confident about the future growth prospects of Adelaide and see it as a good entry cost to the astute investor.

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Tasmania

The Southern Most state of Australia and the only one separated from the mainland, Tasmania has proven to be one of the finest clean environments in the world, which is enjoyed by it's local population of almost 0.5 million people, based mainly in the states capital city of Hobart.

This has become one of it's most valuable assets and it strives strongly to protect this reputation.

As such, Tasmania is considered an ideal retirement destination and the local property market has enjoyed considerable success due to the influx of people seeking to enjoy the pristine air, water and general environment.

The other major winner of the clean environment has been the fishing and agriculture industries, which are considered amongst the finest produce in the world.

This is put down to the pollution free environment of this state.

Even Tasmanian beer has received international recognition due to the quality of the "secret ingredient", pure Tasmanian water.

It's close proximity to Victoria and New South Wales also ensures it benefits greatly from eco friendly Tourism which adds to the economy.

Best Attributes

Current Economic Statistics

Source: 1 Australian Bureau of Statistics www.abs.gov.au
2 Real Estate Institute of Australia

Current Tasmania Market Comment

The high level of owner occupier and low levels of speculators has kept this market fairly safe despite all that is occuriing globally.

Change of Lifer's heading to Tasmania are now wealthy professionals that have made their fortunes and now want to enjoy it in a pristine environment, so expect this to continue to accelerate and push prices up from their current low base, albeit that it may be slower in the short term as they deal with the reduction in their pensions and investments through the global market crash.

Rental is hard to assure and lower yields than other places, but the entry price compensates for this for the astutue buyer.

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Northern Territory

The territories population of 200,000 is the lowest of any Australian state, however this has not stopped the Northern Territory from proving itself as a potential investment zone.

The capital of Darwin is the closest Australian city to Asia and is developing itself as a gateway for trade.

In addition, the environmental tourism in this state is very strong with the world famous Ayres Rock and Kakadu National Park almost instantly recognisable internationally. This was greatly assisted by the success of the "Crocodile Dundee" films.

Significant infrastructure investment is ongoing and this will no doubt continue to benefit investors.

The terrirtory also boasts much mineral wealth on a grand scale.

Due to the small size of the capital, the recent growth has put pressure on the property supply and seen attractive growth rates as a result.

Best Attributes

Current Economic Statistics

Source: 1 Australian Bureau of Statistics www.abs.gov.au
2 Real Estate Institute of Australia

Current Northern Territory Comment

The minerals boom has been kind to the top end and seen a dramatic change in the property landscape of Darwin.

This shouldn't slow down too much in the future, however a strong recent surge in construction may level this market off, so you will need to keep an eye on the supply side to make sure it doesn't outpace demand.

A smaller population means rental is often more attractive than ownership, so be careful to also have a good exit strategy.

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